ECB Updates Collateral Rules to Boost Risk Protection

The European Central Bank (ECB) is revising its rules for assessing collateral in Eurosystem monetary policy operations. The updated guidelines will take effect on November 30, 2026.

Under the new rules, the ECB will use the second-best external credit rating to determine collateral eligibility and haircuts on most private sector assets. This change aims to enhance risk protection and ensure asset equivalence.

The ECB has also updated its risk control framework for monetary policy credit operations. The revised framework includes a more granular haircut schedule for own-used assets and individual credit claims.

Credit claims benefiting from COVID-19 public sector guarantees will remain eligible collateral only until the end of 2026, marking an end to pandemic-era accommodations in the collateral system.